The two programmes were initiated in 2007 to delist Malakoff from the local bourse.

Malakoff has indicated plans to return with an initial public offering (IPO) next year, an effort which could go towards addressing the company’s debt. It had consolidated borrowings of 10.5 billion ringgit ($3.37 billion) at end 2011, according to RAM.

RAM expects the company’s financial position to become more fragile due to the weight of recent investments. Malakoff hascommitted 1.45 billion ringgit in equity towards the Tanjung Bin power plant, Southeast Asia’s biggest coal-powered independent power producer (IPP).

It also purchased 40 percent of a power facility in Bahrain for 310 million ringgit as part of Malakoff’s ongoing overseas expansion, which has involved projects in Saudi Arabia, Algeria,Oman and Jordan.

“Given that these assets have long gestation periods and substantial debts of their own to service prior to making any distributions to Malakoff, incremental earnings and cash generation from the investments are expected to remain minimal in the near term,” said RAM on Thursday.

The ratings agency also highilghted Malakoff’s level of dividend payouts, which averaged 174 million Malaysian ringgit ($55.80 million)in the past three years. “We are of the view that such levels are likely to further impinge on the company’s financial robustness,” said RAM.